The Securities and Exchange Commission announced fraud charges against Cooper J. Morgenthau, the former CFO of African Gold Acquisition, for orchestrating a scheme in which he stole more than $5 million from the company and from investors in two other SPACs that he incorporated.
Morgenthau, 35, of Fernandina Beach, Florida, pleaded guilty to one count of wire fraud on Tuesday before U.S. District Judge Paul Engelmayer in Manhattan federal court.
The SEC’s complaint alleges that, from June 2021 through July 2022, Morgenthau embezzled money from African Gold and stole funds from another SPAC series called Strategic Metals Acquisition I and II to pay for his personal expenses and to trade in crypto assets and other securities.
Morgenthau faces a possible prison sentence of 6 to 7-1/4 years, under recommended federal guidelines, at his scheduled April 25 sentencing.
He also agreed to forfeit $5.11 million and pay an equal amount in restitution, and settled related civil charges by the SEC.
African Gold Acquisition last August had disclosed the discovery of “irregularities” in its financial statements and announced the CFO had been fired. The irregularities did not extend to its trust account, which holds about $415.5 million.
The SPAC completed its IPO in February 2021. African Gold Acquisition intends to focus on a target with operations or prospective operations in the gold mining sector.
According to the SEC’s complaint, Morgenthau concealed unauthorized withdrawals by falsifying African Gold’s bank account statements and then provided those falsified documents to African Gold’s auditor and accountants for purposes of preparing African Gold’s SEC filings. During the same general time period, Morgenthau raised money from Strategic Metals’ investors based on misrepresentations that the money would be used to launch the Strategic Metals SPACs, when in fact Morgenthau misappropriated the money for personal uses, including to conceal his embezzlement of African Gold’s funds.
The SEC’s complaint, filed in the U.S. District Court for the Southern District of New York, alleges that Morgenthau violated antifraud provisions of the federal securities laws, lied to African Gold’s auditor and accountants in violation of the Securities Exchange Act of 1934, knowingly falsified African Gold’s books and records, and filed false certifications with the SEC. Morgenthau consented to a judgment enjoining him from further federal securities laws violations and barring him from serving as an officer or director of a publicly traded company. Read more.
